PIERRE, S.D.(SDBA)- The Senate Taxation Committee approved a bill Wednesday that would lower the cap on property tax revenue increases for local governments from 3 percent to 2.5 percent annually.

House Bill 1235, sponsored by Rep. Greg Jamison, R-Sioux Falls, passed 6-0 with one member excused, despite concerns from local government associations about potential impacts.

Jamison characterized his bill as a targeted approach to address mounting property tax concerns.

The bill reduces the maximum annual growth in property tax revenue that taxing entities can collect.

Jamison explained it would push local governments to justify tax increases through opt-outs directly to voters.

Local government representatives testified against the measure.

Yvonne Taylor with the South Dakota Municipal League noted cities collect only about 12 percent of property tax dollars while facing similar inflationary pressures as state government.

Craig Matson, representing county commissioners, expressed particular concerns about impacts on high-growth counties.

Heath Larson from Associated School Boards of South Dakota warned of potential complications for school budgets.

Committee members acknowledged the concerns but advanced the bill to keep property tax relief discussions active in the flegislative session’s final days

Several senators indicated their committee votes might differ from their positions on the Senate floor, depending on the fate of other property tax measures moving through the process.

The bill previously passed the House 39-31.